Redundancy Pay
Written in plain language for general understanding. This is educational content, not legal advice. Based on UK Acts of Parliament, statutory instruments, and official guidance.
UK National Law
What is this right?
If your job genuinely disappears — because the business is closing, your workplace is shutting down, or fewer workers are needed — you may be entitled to statutory redundancy pay.
The formula is based on your age, weekly pay (capped at £719 per week), and years of service (up to 20):
- Under 22: half a week's pay per year of service
- 22 to 40: one week's pay per year of service
- 41 and over: one and a half weeks' pay per year of service
The maximum statutory redundancy pay is £21,570. Your employer may offer more in your contract.
When does it apply?
- You have been continuously employed for at least 2 years.
- You are an employee (not a worker or contractor).
- The redundancy is genuine — the role itself is disappearing, not just being renamed or given to someone else.
- If your employer offers suitable alternative employment and you unreasonably refuse it, you may lose your redundancy pay.
What should you do?
- Check your contract — you may be entitled to enhanced (above statutory) redundancy pay.
- Your employer must consult with you before making you redundant. If 20+ people are at risk, there must be collective consultation (30 or 90 days depending on numbers).
- Ask for the selection criteria in writing — it must be fair and objective (length of service, skills, performance).
- You're entitled to reasonable time off to look for new work or arrange training.
- Statutory redundancy pay is tax-free. The first £30,000 of any additional payment is also tax-free.
What should you NOT do?
- Don't accept a "redundancy" if the job still exists — if your employer hires someone else for your role, it's likely unfair dismissal, not redundancy.
- Don't sign a settlement agreement without getting independent legal advice. Your employer must pay for this advice.
- Don't unreasonably refuse alternative employment — you have a 4-week trial period in the new role, but refusing a genuinely suitable offer can cost you your redundancy pay.
Legal Resources
We may earn a commission if you use these services — at no extra cost to you. This supports our mission to make legal information free for everyone.
LawDepotCreate employment contracts, demand letters, and workplace documents in minutes. State-specific templates reviewed by lawyers.Create Business Documents →LegalNatureCreate employment agreements, NDAs, and workplace policy documents online. Attorney-drafted templates customized to your state.Create Documents →LegalZoomSend a demand letter or consult an employment attorney online. Fast, affordable, and no office visit required.Get Legal Help →